Melbourne has topped the list of Australian Property Monitors (APM)'s quarterly price growth series for the last quarter of 2007, with capital growth of 25% blitzing the nation's other capital cities.
Although large growth rates were recorded in many of Australia's capital cities, Melbourne set a record last year with a house price growth rate of 25%, pushing the median price to $370,059.
The next highest growth rates were Brisbane and Adelaide, growing 20.1% and 20% respectively.
Although Melbourne broke a growth record, Adelaide posted the best all-round performance of all housing markets in the country; not only did housing rates rise by 20% to $333,845, but unit values increased by 24% to $211,114.
Sydney had one of the lowest growth rates, with a 5% increase in house prices to $528,105, and a 0.5% increase in unit prices to $363,843, however, it was the best performance of the Sydney housing market since 2003.
"Sydney house and unit values have been the laggard of the Australian property market for over four years now," said Michael McNamara, general manager of Australian Property Monitors.
"With Sydney apartments looking so cheap compared to other capitals, and assuming there is a transfer of cash from stocks to other asset classes, we have Sydney apartments as our number one pick for growth over the next few years."
Canberra's property market continued to perform well in 2007 - recording a 6.7% increase in housing values to $442,022, and a 2.4% increase in unit prices to $311,396 - and is expected to take over from Perth as Australia's second most expensive city to buy property.
Brisbane was top performer in the December quarter, with both house and unit values growing at 3.9% (to $354,113) and 0.8% (to $289,484) respectively, though a slow down is expected for 2008.
Perth and Darwin were the only capitals to report a loss in the last quarter of 2007.
"The Perth market has been more resilient than we expected over the last 12 months, but this report shows the beginning of a sustained period of weakness in those markets that should see significant further easing in property values over 2008," McNamara said.
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